LONDON, March 9 (Reuters) - World shares hit their highest in over a week on Friday as a slowdown in wage gains in the United States helped cool fears about faster inflation and interest rate hikes this year.

The MSCI All-Country World index, which tracks shares in 47 countries was up 0.7 percent on the day and 2 percent for the week, having also been buoyed by news Donald Trump and North Korea’s Kim Jong Un planned to meet by May.

Nonfarm payrolls jumped by 313,000 jobs last month, data from the U.S. Labor Department showed, recording their biggest increase in more than 1-1/2 years.

But average hourly earnings edged up only four cents, or 0.1 percent, to $26.75 which was a slowdown from the 0.3 percent rise in January. That also lowered the year-on-year increase in average hourly earnings to 2.6 percent from 2.8 percent in January.

U.S. stocks gained after the data, with both the benchmark S&P 500 and the Dow Jones Industrial Average each up 1 percent.

“The great news is the labor participation rate went up, the headline numbers are great, and the average hourly earnings has settled back down into consensus,” said Art Hogan, chief market strategist at Wunderlich Securities in New York.

“It’s a great report across the board and I think that moves markets higher.”

Upbeat jobs data last month, particularly a stronger than expected rise in wages, fanned speculation about faster interest rate rises in the United States, causing a rout in the bond market and hammering world equities.

The U.S. Federal Reserve is widely expected to raise interest rates at least three times this year, with some analysts even expecting four.

The pan-European STOXX 600 index jumped to a session high. It was last up 0.5 percent, and Britain’s FTSE 100 rose 0.3 percent to a session high.

Shares in Asia, which staged sharp rallies after U.S. President Donald Trump said he was prepared to meet North Korea’s Kim Jong Un, potentially marking a major breakthrough in nuclear tensions between the two countries.

YEN DIVES

In currencies, the Japanese yen was the biggest mover, falling more than half a percent against the dollar to its lowest in over a week following the news on North Korea.

The drop was partly a anti safe-haven move but also followed a Bank of Japan meeting where it kept monetary policy unchanged and gave no hint of ending its massive stimulus drive. The yen has gained 7 percent against the dollar since the start of the year on concerns that the outbreak of a trade war would derail a global growth recovery.

“We are trying to find a bottom on dollar/yen and the other thing to watch for is when the typical year-end repatriation flows that are made by Japanese institutions for the fiscal year end abates, and that might push dollar/yen even higher,” said Kenneth Broux, a currency strategist at Societe Generale.

Despite its 0.6 percent individual gain on the yen, the dollar index, which measures the greenback against a basket of currencies, was down 0.1 percent due to weakness against the Canadian dollar, the pound to a lesser extent the euro.